Crypto currencies and NFTs are hot topics at the moment. Plenty has been written and said about the advantages of these technologies, and NFT's in particular seem set to revolutionise the world of digital art. Yet there is potentially a very large problem that nobody seems to want to discuss lest they get labelled a party pooper... and that is the unseen environmental impact of these ground-breaking technologies.
When people think about greenhouse gas emissions they picture dirty black clouds drifting from smoke stacks, passenger airliners streaking across blue skies or perhaps massive steaks sizzling on a barbecue. However, an often overlooked culprit is the boring old computer data centres that run our online world. And within this sector some of the biggest contributors are the systems that support our favourite cryptocurrencies and NFTs. You may know about NFT's already as they have become fairly mainstream, but what exactly are they? NFTs, or Non-Fungible Tokens by their full name, are like digital serial numbers permanently attached to a particular digital asset, like an illustration, a video clip or a music file. These NFTs can be used to record ownership of the digital asset and help with tracking the buying and selling of these assets. NFTs don't stop the asset being shared or viewed, they are literally just there to record ownership... so you could describe them as 'bragging rights'! The NFT market is exploding at present and ludicrous money is changing hands - in fact the most expensive NFT ever sold, a digital collage by the artist known as 'Beeple', changed hands for a whopping $69m in early 2021! If you are struggling to comprehend this, you are not alone - my head hurts when I think about it! And that was before I heard about the environmental cost of these transactions..
A recent article by artist Memo Akten claims that minting a single NFT (which happens when the rights to a digital artwork are sold in the form of an NFT) creates emissions equivalent to an average EU resident's electricity consumption for one month. And when multiple editions of a single artwork are issued the cost can be tens or even hundreds of times higher. Due to the complexity behind all of this technology there are differing views on the accuracy of these figures. Many believe these figures to be totally inaccurate stating that the more these platforms are used the lower the overall cost will be - much like the cost per person of a long-haul flight if there is one person on the plan compared to it being full. There are also many who say that most of this computing power is provided by renewable sources - such as surplus hydro-electric power in parts of China. This is great, however China still seems to be burning a lot of coal to generate electricity... shouldn't those renewables be helping to reduce that instead of facilitating the sale of artworks?
Unfortunately it is very difficult to have an honest, unbiased discussion about the carbon cost of crypto and NFTs since many people are heavily invested in them, and therefore don't want to acknowledge that there could be a serious flaw in the system. There is a definite whiff of crypto-greed in the air at the moment with thousands of tech savvy investors sensing their opportunity to get rich quick on the back of 'flipping' NFTs or speculating on cryptocurrencies. For them it is highly inconvenient to acknowledge that they could be making the climate crisis far worse.
While I am not personally invested in cryptocurrencies or NFTs, I am really excited about the opportunities that the technologies bring - the ability to bypass monolithic financial institutions, the speed and simplicity of global transactions, and the opportunities for artists to earn fair money for their work. For this reason I find myself rooting for an eco-friendly solution, however we cannot ignore the problem, and until more independent research has been done on the topic I would advise caution. I believe the problems are solvable, as long as those leading the charge are responsible enough to be objective and transparent about the situation.
Until next time!
Doug
aka The Regeneralist
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